Economics class: Inflation tests pricing power of global brands
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
This article picked by a teacher with suggested questions is part of the Financial Times free schools access programme. Details/registration here.
Specification:
Inflation, price elasticity of supply, price determination and mechanism, consumers’ behaviour
Click to read the article below and then answer the questions:
Inflation tests pricing power of global brands
Define inflation
“Generally, the experience when rapid price inflation hits the consumer goods industry is that there is some compression in margins for a year or so, and then most gets passed through to the consumer,” Hayllar said. Explain how product elasticities influence producers’ decisions to pass margin compression on to their customers
Explain with a D-S diagram the cost of production increases of some goods driven by migrant labour shortages
Discuss the effectiveness of “shrinkflation” strategies. Based on subject knowledge and your personal experience, include alternative views of consumers’ behaviour
Gian Luca Scappini, Stepney Green Maths, Computing and Science College
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